The Travel & Tourism Competitiveness Report 2007 - World Economic ...

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Executive Summary xiv 7. Ground transport infrastructure 8. Tourism infrastructure 9. ICT infrastructure 10. Price competitiveness in the T&T industry 11. Human resources 12. National tourism perception 13. Natural and cultural resources The pillars are organized into three subindexes capturing broad categories of variables that facilitate or drive T&T competitiveness.These categories are (1) T&T regulatory framework, (2) T&T business environment and infrastructure, and (3) T&T human, cultural, and natural resources. The first subindex captures those elements that are policy related and generally under the purview of the government (policy rules and regulations, environmental regulation, safety and security, and prioritization of Travel & Tourism); the second subindex captures elements of the business environment and the infrastructure of each economy (air transport infrastructure, ground transport infrastructure, tourism infrastructure, ICT infrastructure, and price competitiveness); and the third subindex captures the human and cultural elements of each country’s resource endowments (human capital, national tourism perception, and natural and cultural resources). Each of the pillars is made up of a number of individual variables.The dataset includes both hard data and Survey data from the World Economic Forum’s annual Executive Opinion Survey.The hard data were obtained from publicly available sources, international T&T institutions, and T&T experts (for example, IATA, ICAO, UNWTO,WTTC, UNESCO).The Survey is carried out among CEOs and top business leaders in all economies covered by our research—these are the people making the investment decisions in their respective economies.The Survey provides unique data on many qualitative institutional and business environment issues. The exact methodology underlying the construction of the TTCI is described in Chapter 1.1. The TTCI Rankings for 2007 The rankings from the TTCI for the 124 countries covered in this year’s Report are presented in Table 1, with the rankings in each of the three subindexes.Tables 2, 3 and 4 show the rankings within each subindex and individual pillar. Switzerland takes the leading position in the TTCI rankings, followed closely by Austria and Germany. Switzerland owes its position at the top to strengths in all areas covered by the Index. As is well known, Switzerland is an extremely safe country, with excellent health and hygiene indicators, as well as environmental regulation that is among the most stringent and effective in the world. And in a country that has some of the most well regarded hotel management schools in the world, the quality of the country’s human resources is second to none, ensuring an adequate supply of highquality staff for the industry.The T&T infrastructure is also among the best in the world, making it very easy and comfortable for visitors to move around the country. Further, the country’s natural and cultural resources are among the richest in the world. Switzerland is home to six World Heritage sites, a significant number for such a small country, and nearly 30 percent of the land area in the country is protected. Given the importance of policy in driving T&T competitiveness, it is also notable that Switzerland is one of the only high-income countries, together with Spain, that is among the top 10 countries with regard to the prioritization of Travel & Tourism. All of this comes together to make Switzerland a very attractive place to develop the T&T sector. Austria and Germany, ranked 2nd and 3rd, respectively, share a number of characteristics with regard to their own T&T environments. For example, both countries are among the top three countries, together with Denmark, in the quality of environmental regulation, and they are among the top four in terms of safety and security in the country, with very low crime and violence and reliable police services. Most strikingly they hold the top two spots in natural and cultural resources, ranks attributable to several World Heritage sites in both countries (especially in Germany) and large protected national parks and such areas. But there are some nuances. For example, Germany is rated as doing better with regard to the quality of transport infrastructure, particularly ground transport infrastructure, where it is rated number 1, whereas Austria’s tourism-specific infrastructure is rated as the best in the world, ahead of Germany. And Austria also outperforms Germany quite strongly in the prioritization of Travel & Tourism by the country. The United States is ranked 5th in the Index. It is among the top three of the 124 economies covered regarding natural and cultural resources, with a large number of World Heritage sites (20 of them), as well as much protected land area, making the country an attractive destination.The country also has an excellent infrastructure and business environment for Travel & Tourism, ranked number 1 in the overall subindex: it has the most well developed air transport infrastructure in the world, by a significant margin, as well as excellent tourism infrastructure.The country’s human resources also get excellent marks (ranked 5th overall). It should be noted, however, that hiring foreign labor is highlighted as difficult (ranked 43rd).This is an area of concern because of the seasonality of much of the tourism labor force. France, the most-traveled-to destination in the world, is ranked just outside the top 10 at 12th place. The country’s strengths lie in areas such as natural and cultural resources (with, for example, 30 World Heritage sites, among the highest in the world), the quality of the air and ground transport infrastructures (both ranked 4th),
and health and hygiene (9th). However, these strengths are offset by weaknesses such as the country’s policy rules and regulations (ranked 40th), and, most particularly, issues related to national tourism perception, particularly the general attitude of the French toward visitors (ranked a very low 122nd overall). Spain, a country that has seen an impressive increase in tourism over the years, is ranked 15th overall, just behind France within Europe. Spain’s strengths can be traced to its excellent tourism infrastructure (ranked 2nd) and air transport infrastructure (ranked 7th), as well as excellent natural and cultural resources (with the second highest number of World Heritage sites in the world, second only to Italy).And Spain is notably ranked 3rd overall with regard to the prioritization of the T&T sector by the country, the top-ranked European country in this area, demonstrating the recognition within Spain of the importance of the sector as an important driver of economic growth. Italy, the country with the highest number of World Heritage sites in the world, ranks a mediocre 33rd in the TTCI ranking.The country is strongly assessed for its cultural aspects and its very good tourism infrastructure. However, Italy’s T&T competitiveness suffers from several weaknesses, which bring the overall rating down.These include policy rules and regulations, where it ranks a dismal 70th—below most European countries because of its very strong foreign ownership restrictions and rules governing FDI. Further, the government is not seen to be prioritizing the sector (ranked 92nd). Within Asia, Hong Kong is measured as the economy with the strongest T&T competitiveness (ranked 6th overall), followed closely by Singapore (8th).These economies have excellent infrastructures: both their ground transport infrastructures are assessed as among the top three in the world, and their air transport infrastructures also get high marks.They also have top-notch human resources, providing healthy and well-educated people to work in the sector.With regard to the policy environment, they hold the top two places out of all economies, with regulatory environments that are extremely conducive to the development of the T&T industry (policies facilitating foreign ownership and foreign direct investment, well-protected property rights, few visa restrictions). Further, they are among the safest countries of all assessed with regard to crime and security issues. Hong Kong is unsurpassed in the quality of health and hygiene, and Singapore is ranked second in the overall prioritization of Travel & Tourism. Australia is ranked 13th overall, just ahead of New Zealand (14th). Both countries are characterized by excellent natural and cultural resources, with much nationally protected land area and, in the case of Australia, many World Heritage sites as well (16, placing the country 12th). And given the importance of the natural environment for much of their leisure tourism, it is notable that they also have comparatively stringent environmental regulations, which are aimed at ensuring that this remains a sustainable strength. Further, both countries are characterized by a relatively strong prioritization of the T&T sector and effective destination marketing campaigns. Malaysia, ranked 31st, has good ground transport infrastructure and excellent price competitiveness—it is ranked 2nd overall on this indicator, with very low ticket taxes and airport charges, low comparative fuel prices, and a favorable tax regime.The country is perceived as quite safe (24th), although health and hygiene indicators lag behind many other countries in the region, with in particular a low physician density.The country’s policy environment is measured as relatively conducive to the development of the sector (ranked 26th), and the government is prioritizing Travel & Tourism, with one of the highest T&T fair attendances in the world (ranked 2nd) and an excellent evaluation for its destination marketing campaigns (ranked 6th). Thailand is ranked 43rd in the TTCI, just behind Korea (ranked 42nd).Thailand benefits from a very friendly attitude toward tourists (ranked 6th), and the sector is indeed prioritized by the government (ranked 14th) with excellent destination marketing campaigns and an effort to ensure national presence at major travel and tourism fairs internationally. However, important weaknesses remain, particularly regarding the quality of transport and tourism infrastructure, both of which remain relatively underdeveloped. India is ranked 65th overall.The country has some clear strengths, linked mainly to cultural endowments. It ranked a very high 7th overall with regard to the number of World Heritage sites in the country, and it also benefits from a famously welcoming attitude toward foreign travelers.The country also benefits from excellent price competitiveness, ranked 6th overall, with very low ticket taxes and airport charges as well as low prices in the economy as a whole.With regard to the policy environment, property rights are indeed well protected and foreign ownership is authorized, although the stringency of visa requirements places India a very low 106th overall. However, the tourism infrastructure remains underdeveloped. Furthermore, despite government and industry efforts to promote the country abroad (India is ranked 4th with regard to tourism fair attendance) and the exposure given to recent promotional campaigns, the assessment of marketing and branding to attract tourists remains mediocre (ranked 59th). China is ranked 71st in the TTCI. Although China is ranked 3rd in terms of World Heritage sites and 11th in terms of price competitiveness, it has a policy environment that is not at all conducive for T&T development (ranked a low 97th), with property rights that are not sufficiently protected, strong foreign ownership restrictions, and stringent visa requirements. Environmental regulation also gets low marks, with the government not seen to be prioritizing the development of the sector in Executive Summary xv
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